THE PRESIDENT: Good morning. This morning I'd like to give you a
progress report on our fight against waste, fraud, and abuse in the
Medicare system. Medicare is more than just a program; it reflects our
values. It's one way we honor our parents and grandparents -- and
protect our families across the generations. This past summer, we took
historic action to strengthen Medicare by improving benefits -- more
mammograms, cancer screenings, major improvements in diabetes care,
expanding choices for recipients in health plans, and extending the
life of the Trust Fund to at least the year 2010. I have also named
four distinguished experts to a bipartisan commission that will find
ways to ensure that Medicare will be able to serve baby boomers and our
children as faithfully as it has served our parents.

But to protect Medicare and the fundamental values it represents,
we also must vigorously fight the waste, fraud, and abuse that is
clearly in the system -- activities that diminish our ability to
provide high-quality, affordable care for some of our most vulnerable
citizens. Medicare fraud costs billions of dollars every year,
amounting to an unfair fraud tax on all Americans and undermining our
ability to care for those most in need. Taxpayers deserve to expect
that every cent of hard-earned money is spent on quality medical care
for deserving patients.

I am proud of what we've already accomplished to crack down on
abuse in Medicare. Since 1993, we have assigned more federal
prosecutors and FBI agents to fight health care fraud, and as a result,
convictions have gone up 240 percent. We have saved $20 billion in
health care claims. Two years ago, the Department of Health and Human
Services launched Operation Restore Trust. Already it has identified
$23 in fines and settlements for every dollar invested in the program.
Our historic balanced budget agreement last summer gives us an array of
new weapons to help keep scam artists and fly-by-night health care
providers out of Medicare in the first place. And earlier this fall, I
announced new actions to root out fraud and abuse in the mushrooming
home health industry -- from a moratorium on new home health agencies
entering the system to a doubling of audits to a new certification
renewal process.

But we must do more. Sometimes the waste and abuses aren't even
illegal; they're just embedded in the practices of the system. Last
week, the Department of Health and Human Services confirmed that our
Medicare program has been systematically overpaying doctors and clinics
for prescription drugs -- overpayments that cost taxpayers hundreds of
millions of dollars. Such waste is simply unacceptable. Now, these
overpayments occur because Medicare reimburses doctors according to the
published average wholesale price -- the so-called sticker price -- for
drugs. Few doctors, however, actually pay the full sticker price. In
fact, some pay just one tenth of the published price.

That's why I'm sending to Congress again the same legislation I
sent last year -- legislation that will ensure that doctors are
reimbursed no more, and no less, than the price they themselves pay for
the medicines they give Medicare patients. While a more modest version
of this bill passed last summer, the savings to taxpayers is not nearly
enough. My bill will save $700 million over the next five years, and I
urge Congress to pass it.

There must be no room for waste, fraud, and abuse in Medicare.
Only by putting a permanent stop to it can we honor our parents,
protect our taxpayers, and build a world-class health care system
for the 21st century.